The choices and combinations of approaches selected for the funding and finance framework should reflect equity considerations—specifically generational equity, equity across income groups, and geographic equity. Generational equity refers to the allocation of the cost burden across time or generations. Although it is appropriate to use capital financing to make capital investments, particularly for long-lived, larger capacity enhancements to the system (such as new bridge spans, new highways and major reconstruction, and transit system extensions), policy makers should avoid overcommitting future revenues and shifting the financial burden to future generations, which in turn limits future investment opportunities. Decisions about how financing mechanisms are deployed have a direct bearing on generational equity and must consider the distribution of financial burden between current and future payers relative to the distribution of benefits.
Income group equity refers to the relative burden placed on individuals across the economic spectrum. Generally, the lowest-income groups currently pay a larger portion of their incomes for transportation than higher-income groups.3 The funding system should avoid a more regressive allocation of costs and work toward a more progressive allocation.
Geographic equity refers to the extent to which users and beneficiaries bear the cost burden for the portions of the system they use or benefit from, based on their geographic proximity to those portions. For example, people in some parts of the country have to commute long distances for jobs and normal daily activities, requiring more lane miles per capita than areas | |
There will be instances where some amount of geographic cross- subsidies may be required to achieve certain national network benefits. | where jobs and populations are closer together. At the same time, areas with relatively small population bases may bear the burden of supporting highway infrastructure that is valuable to users (especially freight carriers) throughout the country that pass through such areas. The funding and finance framework should attempt to distribute the costs of the system equitably in light of these geographic considerations. There will be instances where some amount of geographic cross-subsidies may be required to achieve certain national network benefits (for example, to support key system improvements in places that are geographically disadvantaged in terms of population density or difficult terrain, requiring expensive infrastructure). When there is such geographic cross-subsidization, it should be transparent and designed to meet network goals. |